25 June 2014

Tai Sin Electric Annual Report (FY2013) Summary - June 2014

Company Profile

Tai Sin Electric Cables Manufacturer Pte Ltd was established with foresight and determination as a cable manufacturing business in 1980. Today, after over 30 years of strategic expansion and diversification, the Group emerged as a leading and trusted electric solutions specialist in Asia. Listed on the Stock Exchange of
Singapore, SESDAQ in 1998, the exceptional growth and operational excellence was rewarded with a transfer to the SGX Main Board in 2005.

Presently known as Tai Sin Electric Limited Group of Companies, the business is streamlined into four Business Divisions. In 2012, a newly acquired group in the business of test and inspection was added to the Services Division offering alongside with Manufacturing, Distribution, and Strategic Investment. These divisions are well designed to meet the specific needs of our diverse customers ranging from endusers to contractors, manufacturers, system integrators, engineers and consultants. The business mix of the divisions has allowed the Group to continue to achieve growth during difficult times. 

Having a substantial scale of operations in strategic locations continues to strengthen our value proposition to our customers. The Group operates a highly successful network distributing electrical and control products, accessories and solutions to a wide range of local and regional industries which includes Malaysia, Vietnam, Brunei, Indonesia and as far as New Zealand.

Group Financial Highlights (FY Ended 30 June 2013)

The group achieved S$305M revenue, up 9% compared to previous year, with S$24M profit before tax in hand. Company has S$24M cash and S$130M Net Assets.  The EPS was 4.86 cents, NAV stood at 29.76 cents. 

Operations Review

Cable & Wire (C&W) Segment - Contributed 55.44% of total group revenue and 78.86% of profit before tax. An 6% annual increase to S$169.26 M. Tri-Plant Axis Strategy to be strategic contributor to the C&W Segment located in Singapore, Malaysia and Vietnam. Continued prudent management of copper purchasing together with central material procurement policy has lowered raw material cost (Jack: You would see an improvement of gross profit margin over the years).

Electrical Material Distribution (EMD) Segment - Contributed 31.49% of the Group’s total revenue. Segment revenue was $96.13 million, 2.10% higher than the $94.16 million from the previous year, mainly attributed to several major contracts within the Infrastructure and Commercial & Residential Sectors. 

Outlook & Plan

Continued economic uncertainties arising from challenges faced by the Eurozone countries and lack of strong evidence of full recovery in the US and Japan economies, had hampered growth in the first half of FY 2013. For Asia, especially the emerging economies of India and China, growth had moderated somewhat and reverberated across other countries in the region. Sentiments have remained weak with expectations of a mild recovery in the 1st half of FY 2014, and stronger growth in 2nd half of FY 2014 (Jan - June 2014). 

More importantly was that the Singapore government’s package of measures to cool the residential
and, subsequently, the commercial property market seemed to have taken effect by the beginning of new
financial year. Reports had indicated that there would be an oversupply of private residential property from 2016. Sales of commercial property had also slowed.

C&W Segment will continue to focus on the domestic market while casting a wider net in the region to expand market footprint. Cable & wire marketing team plans to further energise its efforts in Johor especially in the Iskandar region, to tap on the Infrastructure and Residential & Commercial Sectors that are expected to come on stream over the next 5 years.

For the EMD Segment, projected new capital investment in the Electronics Cluster expected in 2nd half of FY 2014 means that the company will have to be better geared to harvest more contracts. The EMD Segment is continuously refreshing its business plan that includes forging new partnerships, revamping its customer service programme and extending its offering to include more ‘Green’ products and solutions. 

Financial Ratio Analysis 
  • Company is now trading at PB ratio of 1.23 times and trailing PE ratio of 7.5 times.
  • Trailing dividend yield is around 6%  
  • ROE remains in 8 - 15 x in past 5 years. The ROE was increased last 2 years mainly due to improvement in net profit margin which resulted from larger economic of scale and better operating efficiency.
Largest Shareholders:

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